LOCAL development projects are on target to create 8,000 new jobs over the next four years according to a new report.

An investigation into Irish job creation initiatives by the Paris based Organisation for Economic Co operation and Development (OECD) has found government and EU funded local development programmes have the potential to tackle many of Ireland's social and economic problems.

In its report issued in Dublin yesterday, the OECD says rural and urban partnership projects can create jobs for the long term unemployed and rebuild communities which have suffered wide spread emigration.

It warns, however, that EU funding for such programmes will run out in 1999, and they will require firm government support if they are to be maintained. Over the next four years, £104 million will be spent on projects as part of the Local Development Programme.

Commenting on the report's findings yesterday, Mr Gay Mitchell, Minister of State for Local Development, said the issues raised by the OECD required "careful consideration". The Minister also stressed that he did not fully share the organisation's concerns about future funding for local development in Ireland.

Suggesting that the allocation of further structural funds will be based on employment needs, Mr Mitchell said he was optimistic that Ireland could secure additional EU monies.

The report, commissioned by Mr Mitchell, is based on an examination of 38 partnership schemes in urban and rural communities created by government with the support of EU structural funds, which began in 1991.

In the past five years, the OECD says partnership schemes in urban areas have developed innovative techniques for retraining and placing the long term unemployed in sustainable jobs. Rural partnerships have found new means of increasing employment for the jobless and those who are under employed.

"The preliminary results of this effort to foster development and welfare through new forms of public and private local co ordination are quite promising," the report states.

The "new economy" created by such projects is now more accessible to people on low wages and gives local communities "substantial" power to direct funds from State agencies to benefit their projects, according to the OECD.

The partnerships are legally independent corporations made up of representatives of various local community interests, including the unemployed. Funding is mainly provided for small, community based enterprises which typically employ between one and five people.

The report warns that the entire partnership initiative faces "harsh" tests in the future Partnerships, by their very nature, will create pressures and invite criticism from civil servants or elected public officials. The question of their long term funding will also have to be addressed, it adds.

So far, the OECD believes the Irish approach to local development appears to be "superior" to similar efforts in other European states to combat economic and social problems. It suggests that the Irish experience could provide a role model for other states.